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EDC: Your Partner in Central America. EDC: Facilitating Canadian Trade. EDC is Canada’s official export credit agency (ECA) offering financial solutions to help Canadian exporters and investors expand their international business

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EDC: Facilitating Canadian Trade

EDC is Canada’s official export credit agency (ECA) offering financial solutions to help Canadian exporters and investors expand their international business

We work in partnership with the public and private sectors to enhance the visibility of Canadian companies abroad

EDC’s financial services include financing, insurance and guarantees

EDC’s combined financing and insurance volumes reached $85.8 billion in 2008 (23 % increased over 2007) while serving 8,312 Canadian companies (11% increase)


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EDC: How We Add Value

EDC PRODUCTS

Accounts Receivable Insurance

Protects Exporters’ accounts receivables against non-payment by their buyers

Contract Insurance & Bonding

Guarantee of Exporters’ bid and performance bonds or any advances (ie. Down payments) received


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EDC: How We Add Value, Cont’d

MORE EDC PRODUCTS

Financing*

Flexible, medium- or long-term financing for buyers of Canadian capital goods and services including Structured Finance (Project Finance)

Canadian foreign investment financing can also be considered

Political Risk Insurance

Provided for Canadian companies’ investments or assets in a foreign country, as well as protecting project loans from political risks

*EDC financing for real estate type projects is generally done via a financial institution


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EDC : A FOCUS ON INFRASTRUCTURE

  • EDC’s infrastructure focus covers construction of buildings, roads, ports and airports, design, engineering and electrical power.

  • A goal to introduce Canadian companies to the needs of private and public developers in the Central American market.


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MARKETS OF INTEREST - INFRASTRUCTURE SECTOR

  • In Latin America, the needs for new infrastructure investments exceed US$45 billion annually.

  • Central America is a market of interest to Canadians due to its proximity, and the growth of the trade and banking sectors.

  • Canada has a long tradition in the region and is well respected.

  • Canadian design and construction expertise together with construction supplies are a good fit for the needs of the market.

  • Increased funding by Multilateral Development Banks to meet regional demands in light of current financial/economic conditions.


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ECONOMIC OUTLOOK/POTENTIAL

GDP (2008 est.): US$134.1 bln GDP as PPP (2008 est.): 249.9 blnGDP Growth (2007-2008): 12.4%Canadian exports (2008): C$519.2 mln

Stats: IMF

Central America Region

  • Canada's commercial interests in the region are primarily in construction and infrastructure projects, agriculture, mining, environmental services and services industries.

  • Recently Canada and Panama initiated talks to explore the potential establishment of a Free Trade Agreement between the two nations. The first round of exploratory discussions will take place in May 2008.

  • Canada has a free trade agreement with Costa Rica. The Canada-Costa Rica FTA (CCRFTA) entered into force on November 1, 2002, becoming the cornerstone of our increasingly important bilateral trade and investment relationship. Between 2002 and 2008, two-way merchandise trade increased 49% (from $324 million to $482 million).

  • While current spending on infrastructure is not enough to meet the demands posed by recent trade agreements, the Plan Puebla Panama and the Meso-American Energy Integration Project promise large-scale infrastructure investment.


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EDC’s FOCUS IN CENTRAL AMERICA

Countries of FOCUS:

Costa Rica

Panama

Sectors of FOCUS:

Infrastructure and Environment Sector


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WHY COSTA RICA?

CANADIAN FOOTPRINT

  • Growing Canadian footprint in the market

  • Infrastructure opportunities are key as well as construction and supply into construction projects

  • Canada is leader in Waste Management in Costa Rica

  • Growing interest in Canadian products and services in the construction supply sector

Business Environment

  • A strategic location in the center of the Americas.

  • Preferential access to strategic markets.

  • Foreign investment incentive regimes

  • Strong democratic history - Political stability contributed to the reduction of fiscal deficit, lower interest rates, strong growth since 2005, greater interventions by the Central bank following the introduction of a new exchange regime.

COSTA RICA – (2008 IMF est.)

GDP: US$30.38 billion

Annual growth rate: 15.76%.

Population: 4.5 millionPer capita GDP: US$6,726 Inflation: 12.1%

COSTA RICA – CANADA TRADE (2008)

Canadian Exports to Costa Rica CAD$ 102.6 mln

35.1% increase from 2007

Canadian Imports from Costa Rica CAD$ 376.2 mln

Free Trade Agreement entered into force in November 2002.

Stats: IMF, StatsCan


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CONSTRUCTION SECTOR

COSTA RICA

HIGHLIGHTS

  • The construction industry plays an important role in the Costa Rican economy. It is also one of the most diverse and fastest growing in the region.

  • Prior to the financial crisis, the sector has contributed between 3.7% and 4.0% per year to the country’s GDP. Furthermore, the private sector investment in construction projects increased by 20.7%.

  • The sector employs close to 130,000 people directly. Most construction activity is taken place in the tourist regions of Guanacaste and Puntarenas.

  • Total investment in the construction sector amounted to CAD$2 billion in 2007, representing an important increase due to housing and tourism construction.

  • A slow down is currently being experienced in light of the global financial crisis.


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COSTA RICA

PUBLIC SECTOR

Government investment in public infrastructure:

Government has identified the need to award at least $6.6 billion in new contracts over the next few years

  • Building of roads ($82 million): Ministry of Public Works and Transportation; National Concession Council;

  • New water treatment plant in San José ($276 million): Costa Rican Institute of Acueducts and Sewages (A&A)

  • Expansion of the Liberia airport($ 18.9 million). Ministry of Public Works and Transportation; National Concession Council

  • Expansion of the railroad network and the development of an urban rapid train: Ministry of Public Works and Transportation; National Concession Council

  • Construction of 14 energy generation facilities($3 billion) Costa Rican Electric Institute (ICE)

  • Hospital facilities and equipment ($174 million). Costa Rican Social Security System (CCSS)

  • Construction of a new port in the city of Limon (tbc)


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COSTA RICA

CONSTRUCTION SUPPLIES

  • Gradual change from horizontal construction to a vertical one

  • There is new demand for high rise construction in the city of San Jose. This new development is triggering the need for new technologies, products and systems

  • Need for differentiated building products and for advanced construction systems. These factors have fostered an environment receptive to Canadian building products

  • Building products such as MDF, Plywood and Melamine panels, softwood lumber, doors and Windows, roofing products, bathroom fixtures and partitions, engineered flooring, equipment for scaffolding, shuttering, propping, Cabinetry

  • Costa Rica Construction Sector Main Competitors: USA, EU, Brazil, Chile, Venezuela, Colombia and Mexico

  • SEE ANNEX FOR FURTHER INFORMATION ON SPECIFIC PRODUCTS


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CANADIAN FOOTPRINT

  • Growing Canadian footprint in the market

  • Infrastructure/Construction through out the supply chain including contractors, equipments, and services

  • Large engineering companies currently

    targeting infrastructure projects. (SNC Lavalin, Dessau, Hatch Energy)

  • The construction boom in Panama has

    elevated Canadian interest and has resulted in companies of all sizes to enter the market

WHY PANAMA?

Business Environment

  • Regional hub and logistic center of the Americas

  • Panama is a country with a low fiscal deficit, good debt service ratios, relatively low inflation but high economic growth

  • Panama is a dollar economy

  • International Banking Center, with:

    • Over 70 banks with assets over $40 billion

    • Strict international standards

    • One of the most stable and modern system in Latin America

  • The country remains an open economy with the service sector as the main driver of growth.

  • Free-Trade negotiations between Canada and Panama currently ongoing.

PANAMA (IMF 2008 est.)

GDP: US$23.4 billion Annual growth rate: 18.6%

Population: 3.4 millionPer capita GDP: US$6,882 Inflation: 9.2%

PANAMA – CANADA TRADE (2008)

Canadian Exports to Panama CAD$ 109.8 mln

47.3% increase

Canadian Imports from Panama CAD$ 21.3 mln

Foreign Investment Protection Agreement signed with Panama: 1996

Source: IMF, StatsCan


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PANAMA

CONSTRUCTION SECTOR

HIGHLIGHTS

  • There is an estimated need for US$20-30 bln in new infrastructure investment in Panama over the next 5-10 years

    • Currently, Panama is in year-one of a five-year expansion project

  • Large oil refinery costing US$7 bln at Puerto Armuelles expected to be built. Feasibility studies ending in beginning of 2009

  • Panamanian government in negotiations to construct a second mega-port on the Pacific Coast

  • Strong investment in mega-projects (ie: Panama Canal Expansion) will partly offset weakened international financial markets

Source: Economist Intelligence Unit Limited


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PANAMA

PUBLIC SECTOR

  • PANAMA CANAL AUTHORITY (ACP) - www.pancanal.com

    • Beyond the US$5.25 billion for the expansion. ACP purchases approximately USD300 million annually

  • 2. Ministry of Public Works (MOP) -www.mop.gob.pa

    • By the end of this year MOP will have called for bids of 370 projects with an investment of US$306.5M, in rehabilitation of thousands of roads

  • 3. Ministry of Housing (MIVI) -www.mivi.gob.pa

    • This year MIVI will call for bids of 5,078 houses with an investment of US$36M

  • 4. Community Development and Public Infrastructure Project (PRODEC) www.presidencia.gob.pa

    • The President’s Office will invest US$100M in Public Infrastructure

www.panamacompra.gob.pa

Tenders, frame laws, bid winners


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PANAMA

CONSTRUCTION SUPPLIES

Cement

Steel

Construction cranes

Protective equipment

Engineering Services

Training Services

Heavy equipment/parts

Repair equipment

Project Management

Road materials

Waste Management

Construction Material


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HOW TO TAKE ADVANTAGE OF THE OPPORTUNITIES

  • Participate in a Trade show and or Trade Missions to Panama.

    • CAPAC EXPOHabitat - Panamá, Centro de Convenciones Atlapa,

      • www.capacexpo.com

  • Joint venture or partnerships with developers or construction material importers

  • Use Colon Free Zone (CFZ) or Panama-Pacific Special Economic Area

    • (former HOWARD US military base) for light manufacturing or wholesale operations for Central America, South American and the Caribbean

  • Open regional offices in Panama taking in consideration the air and maritime logistic centre, high speed telecommunication system, banking center (Scotiabank), etc.


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HOW TO TAKE ADVANTAGE OF THE OPPORTUNITIES

  • Contact the Canadian Embassy:

  • Canadian Embassy has a large network of local contacts within construction companies, building materials and the local industry association.

  • The Canadian Embassy can help to identify a partner, local representative and legal council.

  • Canadian Embassy and EDC organize missions of local buyers to visits Canada.

  • Canadian companies can participate in the local building materials trade show " EXPOCONSTRUCCION" held every March.

  • Cámara Costarricense de la Construcción (Costa Rican Construction Association) E-mail: [email protected]: www.construccion.co.cr


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Seizing MDB-Funded Infrastructure Contracts

Two Principal Multilateral Development Banks in the Region

  • World Bank

    • www.worldbank.org

  • Inter-American Development Bank

    • www.iadb.org

  • If you are interested in bidding on MDB-funded contracts, you can download a free copy of the Guide for Canadian Businesses at:

    • www.edc.ca/infrastructure


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EDC – HOW WE ADD VALUE

  • Providing financial solutions to Canadian exporters

  • Creating Match-making opportunities

  • Connecting with buyers


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EDC - HOW WE ADD VALUE

Building External Relationships

An example: Supply to a Condominium Development in Panama

  • EDC was approached in late 2007 for FIN for a new condominium tower

  • EDC – together with the CDN Embassy, introduced the developer to various new CDN companies

  • EDC leveraged the participants from the 2007 Mission and contacted them about this opportunity

  • Several CDN companies are now bidding and some have won contracts with this developer

    EDC believes that our value goes beyond financing in that the financing should be leveraged to open doors for new opportunities for CDN companies

An example: Panama Canal Expansion Project (USD 5 billion project)

  • Hosted the Minister of the Panama Canal Expansion in July of 2006

  • Signed a MOU with the Ministry of Economy and Finance to develop opportunities for Canadian companies

  • Lead a trade Mission to Panama for Atlantic Canada based companies in Mar. 2007 and introduced them to key players in the ACP

  • Organized a mission to eastern Canada for the Panamanian Ambassador to Canada to promote opportunities

  • Committed interest to offer financing and bonding support to ACP in order to facilitate opportunities for Canadian companies

  • Is partnering with DFAIT to provide a private seminar for key government officials to promote CSR


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Key Contacts

Karen Mallory

Sector Advisor - Infrastructure & Environment

Tel: (613) 598-3166/Fax: (613) 597-8667

Email: [email protected]

Nathan Andrew Nelson

Regional Manager (Latin America) - International Business Development Group

Tel: (613) 597-7952/Fax: (613) 598-2503

Email: [email protected]

Luis Cedeño

Trade Commissioner - Canadian Embassy in Panama

Tel: (507) 264-9731/Fax (507) 263-8083

Email: [email protected]

Adolfo Quesada

Trade Commissioner - Canadian Embassy in Costa Rica

Tel: (011-506) 242-4462/Fax: (011-506) 242-4415Email:[email protected]


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INFRASTRUCTURE PROJECTS (2008-2015)

Updated April 2008


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